Seeking automation technology in
The Johor State government aims to acquire advanced
robotics technology from China to aid automation of the
local furniture industry. To advance this a group from the
State International Trade, Investment and Utilities
Committee travelled to China to observe the technology at
work in a factory in Hebei Province
Jimmy Puah Wee Tse, a member of the group said
automation can reduce the local industry’s dependency on
foreign workers while at the same time delivering top
quality furniture for the international market.
Improve trans-shipment competitiveness
Transport Minister, Anthony Loke Siew Fook, has said
that the government intends to streamline regulations
relating to import permits to make Malaysian ports more
attractive and competitive in the trans-shipment sector so
as to compete with ports such as Singapore and Hong
Production costs rising in Sarawak
Beginning this year timber companies in Sarawak had start
paying a higher Rehabilitation and Development tax. The
tax was increased from RM0.60 to RM5 per cubic metre in
January this year. In addition to the revised tax, companies
were required to pay a higher premium for hill species.
Hamden Mohammad, State Forest Department Director,
said the higher premium, rehabilitation and development
taxes will provide funds to strengthen sustainable forest
Analysts say many of the taxes and charges in the forestry
sector have not been revised for decades but that the new
charges have driven up log prices as producers try to pass
on the higher costs. Japanese importers have signaled that
prices of logs from Sarawak are soaring and are becoming
uncompetitive in Japan which has made them to look for
alternative sources such as PNG.
Planted forest area below target
The Sarawak State government’s target of one million
hectares of planted forest by 2020 cannot be met as, to
date, only about 421,000 ha. has been planted.
The State government provided incentives to companies
proposing forest plantations by allowing some of the
licensed area to be planted with oil palm for just one
rotation but this scheme did not work well.
The State government is now telling those with licenses
for plantations who cannot meet the planting target to
surrender their licenses if they are unable to continue to
meet the new forest policy.
Sandakan – potential furniture hub
Sabah’s Chief Minister, Mohd Shafie Apdal, has said the
State government has identified Sandakan as a potential
hub for the furniture industry and that he is in favour of
this as it will help revive the coastal town. He emphasised
that companies in Sabah will be encouraged to invest in
downstream production to create employment
opportunities for local people.
Traders based in Sarawak reported the following export
prices in April:
Sarawak plywood import ban
No further news is available.
Timber legality system for
Rufi'i, Director of Processing and Marketing of Forest
Products at the Ministry of Environment and Forestry
(KLHK), has reported that the government’s new timber
legality certification programme for Micro, Small and
Medium Enterprises (MSMEs) will provide the same legal
umbrella for MSMEs as currently provided by SVLK
certification for large companies.
The new scheme is targeting 400 groups comprising
around 12,000 MSMEs in the forest production and
Purwadi Soeprihanto, Executive Director of the
Indonesian Forest Entrepreneurs Association, said the
Association welcomes this initiative by the government
particularly as it deals with both downstream and upstream
sectors. Academics have also welcomed the new initiative
as this will help eliminate illegal timber from the domestic
Government to formulate carbon trading policy
The government, through the Ministry of Environment and
Forestry (KLHK), is formulating a carbon market
development policy plan. The preparation of this policy is
important because Indonesia does not yet have a
mechanism related to carbon trading, although, in reality,
the practice of carbon trading has taken place.
Minister optimistic environmental management will
Minister of Environment and Forestry, Siti Nurbaya and
Minister of Energy and Mineral Resources, Ignasius
Jonan, signed a memorandum of understanding on
collaboration in a wide range of areas.
The MoU covers forest reclamation and watershed
rehabilitation, licensing arrangements under the control of
the Minister of Energy and Mineral Resources sector,
synchronised utilisation of forest areas, supervision of law
enforcement, small scale mining control in order to control
the use of mercury, control of pollution and environmental
damage and climate change adaption. Siti Nurbaya said,
this agreement will improve environmental management.
Indonesia, South Korea in trade deal talks
According to Iman Pambagyo, Director General for
Indonesia’s International Trade Negotiations in the
Ministry of Trade, said Indonesia and South Korea aim to
complete negotiations for a Comprehensive Economic
Partnership Agreement (IK-CEPA) this year.
He said both countries were committed to improving the
deals in the Regional Comprehensive Economic
Partnership (RCEP) and the ASEAN-South Korea Free
Trade Areas (ASEAN-South Korea FTA).
Redistribution of unproductive forest land
Indonesia has large areas of unproductive state land (forest
cover below 30%) and the Minister of Environment and
Forestry, Siti Nurbaya Bakar, said it is proposed that some
978,000 ha. of such unproductive forest land will be
redistributed for conversion.
The unproductive forest land is located in 20 provinces
with the largest areas being in five provinces, Papua, with
an area of 271,105 ha, Central Kalimantan 225,436 ha,
Maluku 160,473 ha, North Maluku 97,695 ha, and South
Sumatra 45,712 ha.
The central government is preparing the necessary
legislation which will require local governments to prepare
plans for the allocation and use of the land.
Moratorium on natural forest harvesting
permits to be
The government plans to extend the moratorium on the
issuance of new harvesting permits in primary natural
forest and peat land areas.
The Director of Inventory and Monitoring of Forest
Resources in the Ministry of Environment and Forestry
(KLHK), R.A. Belinda Arunawati Margono, said an
extension of the Presidential Instruction Number 10/2011
will be arranged. This will mark the fourth time it has been
MFCC seeking approval for
certification of pilot Gan
The Secretary-General of PEFC, Mr. Ben Gunneberg,
recently met the Deputy Director-General of Forest
Department, Kyaw Kyaw Lwin, to discuss the cooperation
between PEFC and the Forest Department of Myanmar.
While in Myanmar Mr. Gunneberg inaugurated a seminar
held to report progress with the application from the
Myanmar Forest Certification Committee (MFCC) for
PEFC Membership. The seminar also reviewed progress
on the pilot project to secure certification for one FMU.
Barber Cho, Secretary of MFCC, said that MFCC is
seeking the approval of Forest Department to certify Gan
Gaw FMU as a pilot project under the MFCC-PEFC
Cho confirmed that the MFCC, as the national governing
body for certification, had formally applied to PEFC for
membership. He explained that, at present, there is no
certified forest in Myanmar despite Myanmar’s forest
management system being well known.
International investors prefer international arbitration
Representatives from nine US-based companies recently
held discussions with the Myanmar Chamber of
Commerce (UMFCCI). In response to the visit from the
US companies the Minister of Commerce reaffirmed that
all ministries will be adopting international trade rules and
Earlier this year the UMFCCI conducted a course on
arbitration in response to requests from many investors
who want the international arbitration process to be
adopted instead of the Myanmar Arbitration Act 2018.
Plans for new international container terminal in
The local media has reported on plans being prepared for a
new international container terminal in Ahlone township,
on the Yangon River. In April the Myanmar Investment
Commission (MIC) granted permission for Adani
Myanmar to develop, operate and maintain the Ahlone
International Port Terminal.
Adani, registered in Myanmar and incorporated in
Singapore as Adani Global Pte. Ltd. operates as a
subsidiary of Adani Global Ltd.
Tougher penalties for forest crime
In a bid to protect the country’s fast-dwindling forests last
September the Myanmar parliament enacted a tougher
forest law that threatens violators with up to 15 years in
prison. Under the law forest officials can also be punished
for accepting bribes or for being involved in the
extraction, transfer or possession of illegally harvested
logs or products manufactured from such logs.
Also, fines for minor offences have been raised to K30
million (US$20,000) and trespassers living in forests must
vacate their premises within one month of being served
notice, according to U Zaw Min, Deputy Director General
of the Forest Department.
According to the Forest Department, more than 143,000
tons of illegal hardwoods have been seized since the
current administration took office three years ago.
Over the same period, it said, more than 20,000 alleged
timber traffickers were arrested and 9,460 pieces of
machinery and 1,163 chainsaws were seized.
In a press release the Forest Department said that most of
the seizures were made possible by its community-based
system to monitor illegal logging and alert authorities.
The Myanmar Forest Department auctions about 80% of
the timber it seizes. Barber Cho, Secretary of Myanmar
Forest Certification Committee, said that the export of
products manufactured from the seized timber is not
allowed under existing Forest Department regulations and
this ban is included in the framework of the Myanmar
Timber Legality Assurance System.
Higher particleboard prices lifts
The official Wholesale Price Index for ‘All Commodities’
(Base: 2011-12=100) for March 2019 rose to 120.0 from
119.5 for the previous month. The index for manufactured
wood and cork products rose by almost 1% due to higher
prices for panel products and wooden boxes/crates.
The annual rate of inflation based on monthly WPI in
March 2019 stood at 3.18% compared to 2.93% for
The press release from the Ministry of Commerce and Industry
can be found at: http://eaindustry.nic.in/cmonthly.pdf
Analysts comment that consumer sentiment is
and this is driving down consumption of a range of
products. The decline in consumer spending is said to be
because income growth has slowed in both urban and rural
areas where farm output is well below average.
It is anticipated that once the general election is over the
government will move to boost consumption.
Tax reform slow to deliver benefits to major plywood
The Indian media has an interesting commentary on the
impact of the Goods and Services tax (GST) in the
plywood sector in the country. Much of the plywood
manufacturing is in the hands of small and medium sized
plants and many of these have found ways to avoid taxes,
something the large well established brand name factories
could not do.
The Indian plywood sector is categorised as mostly
‘unorganised‘ small units having a 75% share of the
market with the so-called ‘organised‘ companies such as
Century Ply boards and Green Ply Industries making up
The introduction of the GST was supposed to level the
playing field driving the established but moderately sized
mills in the ‘unorganised‘ sector pay tax rates .
The hoped for change in the sector has been slow coming
as only a fraction of the sales from the ‘unorganised‘
sector mills are invoiced thus attracting tax. The greatest
benefit of the GST to the ‘organised‘ sector mills has been
the reduction in overall taxes.
Plantation teak prices
Against a slightly firmer rupee/dollar exchange rate and
rising oil prices, importers and distributors are closely
monitoring developments as their operating costs are
rising. However, C&F prices for plantation teak landed at
Indian ports remain within the range as shown in the
Locally sawn hardwood prices
Prices for imported sawn hardwoods remain unchanged.
Myanmar teak prices
Prices continue as previously reported.
Sawn hardwood prices
Indicative prices for some imported timbers are shown
Weakness in the construction sector has hit demand for
wood based panels especially plywood. In the furniture
sector plywood producers are seeing an oversupply of
Several of the big MDF producers have cut production
some by as much as 70%. 12 months ago the reconstituted
panel sector was attracting considerable investment but
now things have changed.
On a brighter note, shipments of veneer from Gabon for
plywood assembly continue smoothly and recent reports
indicate that veneer shipments from Guyana are
Furniture production bucks the
According to the Brazilian Institute of Geography and
Statistics (IBGE), while overall industrial production fell
in March 2019 after a slight increase in February,
production in the furniture sector rose 5.3% in March
compared to February.
Production in the industrial sector as a whole declined just
over 6% in May 2018 and in the furniture sector there was
a drop in first quarter production despite the good numbers
Tax obstacles in the forest sector
A meeting was recently held between representatives of
the Center for Timber Producers and Exporters of Mato
Grosso State (CIPEM), the Federation of Industries of
Mato Grosso State (Fiemt) and Mato Grosso State
Secretariat of Finance (SEFAZ) recently to discuss tax and
fiscal policy issues that are negatively impacting
development of the forest sector in the state.
A major concern was the tax level on logs in the
Circulation of Goods and Services (ICMS) regulation.
Discussions on this have been ongoing since last year and
CIPEM is discussing with the state government ways to
secure tax breaks for the small forestry and timber
companies that make up 90% of forestry sector in the
A second issue discussed concerned the wood
identification fee which has risen from just over R$2 per
cubic metre to more than R$10 meaning entrepreneurs pay
around R$600 for each truck load of wood instead of the
R$90 collected in the past.
The SEFAZ explained that these charges are set out in the
Law 235/2005 and that SEFAZ has no authority to change
this, the only solution would be the approval of the new
law which is under consideration.
CIPEM expressed concern on the many issues holding
back the forestry sector especially as the forestry sector
represents the fourth largest economy in Mato Grosso
Agribusiness exports in Mato Grosso do Sul
In the Sstate of Mato Grosso do Sul in the Amazon region
agribusiness exports delivered revenues of US$1.13 billion
in the first quarter of 2019 accounting for over 90% of all
export earnings. The forest products sector is the most
outstanding say analysts generating an almost 50% share
of total revenue.
ABIMCI meets German importers
The German Timber Trade Federation (GD Holz) invited
the Brazilian Association of Mechanically-Processed
Timber Industry (ABIMCI) to participate in it importers
ABIMCI had the opportunity to interact with more than
100 German importers and took the opportunity to brief
them on the Brazilian timber sector, the prospects for
future supply, quality certifications and timber origin
During the event wide ranging trade issues were discussed
especially the current supply situation, product quality,
trade and technical barriers, documentation issues on
product origin (EUTR, Due Diligence, etc.) and evaluation
of CE certification.
Remove regulatory barriers to
The Minister of Economy, Carlos Oliva, announced that a
Bill will be presented to Congress aimed at eliminating
barriers to expansion of the forestry, aquaculture and
The Minister warned that quick results may not be
possible as attracting domestic and international
investment takes time but this Bill will lay the foundation
for improvement over the next decade. The forestry sector
has enormous potential for growth, said the Minister.
Private sector promotes forestry project in Ucayali
The D&C Group, a diversified group of companies whose
objective is to create opportunities and employment for the
people of Peru, is promoting an afforestation project on
around 50,000 hectares in Ucayali.
This initiative has been outlined by Samuel Dyer, Group
President who said the project will be implemented
through the Pro-Ucayali business group and will have a
The D&C Group has a 1,000 ha experimental plot in
Ucayali and is now seeking the legal framework to extend
the project which will ultimately provide resources for
small and medium-sized companies.
Dyer said that this project will utilise available
technologies and will be structured to be profitable, unlike
many other plantation efforts that have resulted in
scattered plots from which it was unprofitable to harvest
and transport. He said plantations in this project will be no
more than a 100km from the propose site for processing.
Bi-oceanic rail link
The regional governor of Ucayali, Francisco Pezo,
announced that his administration will promote the
construction of a rail connection with the Brazilian state of
Acre. This would form a part of the Bi-oceanic Train that
will link Peru and Brazil.
During a 2013 meeting between Bolivia’s President Evo
Morales and his Chinese counterpart Xi Jinping, the
concept of this project was conceived to link the Atlantic
and Pacific Oceans through a rail link known as the
Central Bi-Oceanic Railway.
The pre-investment study carried out by the Ministry of
Transport and Communications suggests the railway will
link the ports of Santos in Brazil and Ilo in Peru. Pezo
revealed that the Development Bank of Latin America has
shown interest in supporting further work to develop plans
for the rail link.